This report describes a group of demonstration projects for the provision of early childhood development services in 14 Texas communities (mostly rural) and evaluates their activities from a cost-benefit perspective. The 3-year state-funded program was designed to determine how well such projects could generate additional non-state funds from existing resources. Projects providing comprehensive day care services (including child care, health care, parent education and social services) involved approximately 1,670 children, and programs specializing in health services reached more than 1,800 children. Detailed descriptions of individual projects are presented in the appendix. The cost-benefit analysis was based on two major sources: (1) expenditure figures from each project for a typical quarterly operational period; and (2) a random sample of 20 percent of the parents in each project to determine income changes for families receiving child day care services through the demonstration projects. Analysis indicated that state dollars expended on day care in the demonstration projects were effective in generating non-state funds for child and family services. Family income of those receiving project day care services increased, with a corresponding decrease in state assistance payments. When state costs for day care were adjusted to benefits accrued, the actual state share appeared to be only 17 percent of total day care costs. Health benefits for children in the demonstration projects were estimated to far outweigh the amount spent on health care. (BF)